How to Revive Lapsed LIC Policy ?
Revival of Lapsed LIC Policy
If the policyholder of LIC policy forget to pay his premium on the due date of deposit of premium , the LIC usually offers ‘days of grace’ (minimum 1 month – if mode of payment is Yearly/Half-yearly/Quaterly and 15days – if the mode is monthly).
However, if premium is not paid by on or before end of this grace period, the policy lapses. Revival of a lapsed policy is considered for either on non-medical or medical basis depending upon the age of the life assured at the time of revival and the sum to be revived. A lapsed policy has to be revived by payment of the accumulated premiums with interest as well as giving the health requirements as required.
Revival of a LIC policy is a considered as fresh contract wherein the LIC can impose fresh terms and conditions. Revival of policies depends on the actual reasons behind a customer not paying his/her premiums and also on the Declaration of Good Health (DGH) and other Medical Reports (if any).
Concessions for claims during the lapsed period:
1. If the policyholder has paid premiums for atleast 3 full years and subsequently discontinued paying premiums, and in the event of death of the life assured within six months from the due date of the first unpaid premium, the policy money will be paid in full after deduction of the unpaid premiums, with interest upto date of the death.
2. If the policyholder has paid premiums for atleast 5 full years and subsequently discontinued paying premiums and in the event of death of the life assured within 12 months from the due date of first unpaid premium, the policy money will be paid in full after deducting the unpaid premiums, with interest upto date of the death.
Revivals:
If the premium under a policy is not paid within the days of grace the policy lapses. Revival is a fresh contract wherein the insurer can impose fresh terms and conditions. A policy can be revived under the following types of revival:
1. Ordinary Revival
If a revival of the policy is effected within 6 months from the due of first unpaid premium no personal statement regarding health is required and the policy is revived on collection of delayed premium plus interest(Currently 9% ). The rate of interest to be charged for such delayed premium will depend on the date of commencement of the policy.
2. Revival on non-medical basis
For revival of the policy on non-medical basis the amount to be revived should not exceed the prescribed limit for non-medical assurance taken by the life assured.
3. Revival on medical basis
If a policy cannot be revived under ordinary revival or revival on non-medical basis it can be revived with medical requirements. The medical requirements will depend upon the amount to be revived.
The medical requirements will depend upon the amount to be revived. Policy holder needs to pay all unpaid premiums (from the date of 1st unpaid premium) in lump sum with interest (Current rate of interest is 8% p.a.) along with the required FORM -680,700 and 720 or Medical Report (if Required )
4. The other schemes for revival are
A. Special Revival Scheme
B. Revival by installment
C. Loan- cum- revival
D. Survival Benefit- cum- revival
